EXPLAINER: Starlink advocates for Equity Equivalent Investment Programmes in South Africa's B-BBEE reforms. This is what it means
Elon Musk’s satellite internet venture, Starlink, a division of SpaceX, has formally endorsed South Africa’s proposed Broad-Based Black Economic Empowerment (B-BBEE) policy reforms, advocating for Equity Equivalent Investment Programmes (EEIPs) as an alternative to the mandatory 30% black ownership requirement for telecom license holders.
But what does this mean in simpler terms? We break it down.
Starlink wants to launch in South Africa. But to get a telecom licence, companies must meet Broad-Based Black Economic Empowerment (B-BBEE) rules.
Their current issue lies in the rules, which say:
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The company must be registered in South Africa.
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It must have at least a Level 4 B-BBEE status.
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30% of the company must be owned by black South Africans.
While Starlink agrees with the first two, they are not behind the 30% ownership requirement.
So the internet company came up with a proposal. Instead of giving away shares, it wants to use Equity Equivalent Investment Programmes (EEIPs), which are already recognised in the ICT Sector Code. EEIPs let multinational companies meet B-BBEE goals by investing in training, small black-owned businesses, and digital inclusion.
Starlink noted that companies like Microsoft, Google, and Cisco have already used EEIPs in South Africa.
In addition, Starlink pledges free internet for 5,000 rural schools and free high-speed internet for 2.4 million students.
In South Africa’s political climate, this is why it matters. The government’s National Development Plan wants everyone to have affordable broadband by 2030. The country also currently ranks poorly in global internet speed rankings.
But while Starlink’s satellites could improve access, especially in rural areas, this could create competition for MTN, Vodacom, and Telkom.
The proposal has sparked debate with supporters saying EEIPs encourage foreign investment and still help with empowerment, but critics say letting companies avoid ownership rules weakens B-BBEE and South Africa’s sovereignty.
Starlink argues the law already allows EEIPs as an alternative to ownership. They say ICASA’s strict 30% rule may actually conflict with existing laws.
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